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Document I am retiring on ill health grounds, how do I know if I will be affected by the Annual Allowance?

If you are taking Tier 2 ill health pension benefits you are more likely to be affected by the Annual Allowance because the NHS benefits you are about to receive will have been increased. You may also be affected if you are taking Tier 1 ill health pension benefits and you were paying for added years or additional pension by regular instalments, as you will receive the full amounts you were purchasing.
 
While we are in the process of authorising your Tier 2 ill health retirement benefits we will check to see if your pension growth is more than the Annual Allowance. If they are, we will send you an Annual Allowance pension saving statement before your benefits are authorised.
 
You may be exempt from an Annual Allowance charge if you meet HMRC’s Severe Ill Health Condition (SIHC) test. Our medical advisers will check for this test at the same time as assessing you for Tier 2, and they will inform you and us if you meet this test or not.
 
You would meet the SIHC if you become entitled to all your benefits under the NHS Pension Scheme because you are unlikely do any type of gainful work, in any capacity, other than in an insignificant way before state pension age (SPA).
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